Regulators Bless Google/Motorola Marriage

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Regulators Bless Google/Motorola Marriage

Photo: Jim Merithew/Wired/com

Google on Monday won approval for its $12.5 billion purchase of Motorola Mobility Inc. in both Europe and the United States, a decision that could have wide-ranging implications on the Silicon Valley giant's ability to take on rivals like Apple, RIM and Microsoft.

"After a thorough review of the proposed transactions, the Antitrust Division has determined that each acquisition is unlikely to substantially lessen competition and has closed these three investigations," according to a statement issued on Monday by the Department of Justice.

The decision comes just hours after the European Union signed off on the acquisition. But in the EU, the approval isn’t without reservation. While the European Commission found no reason for concern regarding antitrust regulations, VP of competition enforcement Joaquín Almunia – aka the man in charge of dealing with the mess of convoluted patent issues – included a strongly worded passage in the decision, particularly concerned with Google's potential to abuse its newfound patent trove.

Today's decision does not mean that the merger clearance blesses all actions by Motorola in the past or all future action by Google with regard to the use of these standard essential patents. Our decision today is without prejudice to the legality under EU antitrust law of Motorola's past and Google's future actions. However, the question whether Motorola's or Google's conduct is compliant with EU antitrust law cannot be dealt with in the context of the merger procedure.

Essentially, the European Commission is saying it's keeping its eye on what Google does with MMI's patents (patent expert Florian Mueller goes into this in much greater detail on his blog).

Google first announced the deal late last year under the auspices of a patent play, with CEO Larry Page assuring its other partner Android smartphone manufacturers that it was a purely defensive move.

But Page's insistence on a defensive stance almost drew more attention to the implications of Google's potential foray into hardware. In owning both the Android software and the hardware manufacturer, Google could be in a position similar to other smartphone makers who also own the entire stack – namely its biggest competitor, Apple.

One of Google's largest issues in spreading its software across multiple hardware manufacturers has been specification and compatibility problems; While the software can technically run on hundreds of devices, it's still not a one-size-fits-all approach. Each phone or tablet needs specific fine-tuning and optimization in order to run Android properly, from the display down to the silicon chip that runs the device. So in producing both the software and hardware in-house, Google could eliminate a number of the compatibility issues it has faced in the past.